Software piracy is the theft of software through illegal copying of genuine programs or through counterfeiting and distribution of imitation software products or unauthorized versions of software products. Piracy can include casual copying of genuine software by individuals or businesses or widespread illegal duplication of software programs for profit.
By 1998, about 38% of the software in circulation worldwide was pirated, causing approximately $11 billion in loss to the global software industry. Software piracy is a particularly serious problem where the piracy rate is close to 100% such as in Japan or Popular Republic of China wherein respectively 92% and 94% of the software in use are pirated.
Worldwide, the software industry generates more than $28 billion in tax revenues annually. If piracy was eliminated, it is estimated that the industry would produce one additional million jobs by 2005 and contribute for $25 billion more in tax revenues. The economic losses caused by software piracy are impressive. On the United States, a study commissioned by the Business Software Alliance in 1999 found that: 25 percent of the of the business software applications installed on PCs were pirated and 107,000 jobs, $5.3 billion in wages, $1.8 billion in tax revenues were lost.
Without a global commitment to reducing piracy, the potential for world economic growth is seriously crippled. The high piracy rate inhibits the development of the software industry and precludes it from reaching its full worldwide potential by cheating legitimate software developers and companies of the rights and rewards of their hard-earned intellectual property. Thus, today the software industry as a whole is committed to help governments to meet the challenge of improving and enforcing intellectual property laws, and to educating the public about the importance of intellectual property rights in software. Contributing to the growing piracy rate are the disparate intellectual property and copyright laws of many countries coupled with the impressive growth and spread of the Internet. Although industry organizations (e.g., the “Business Software Alliance”) have been successful in many of their efforts to defeat software piracy, governments around the world must improve their intellectual property laws and enforcement systems.
However, legal and law enforcement measures are costly and time-consuming, generally require access to host computers, being only suitable for large scale piracy. Thus, must techniques for protecting software are today directed towards making it more difficult to produce illegal copies of software. However, there is considerable resistance from final users to this approach, and computer hackers are pride in meeting the challenge of defeating the “lock”. Other protection systems such as placing “time bombs” in programs that are activated if, by example, license fees are not timely paid are also not acceptable by users and can lead to a possible liability for destroying user assets.
Therefore, there is today a need for new protection techniques sufficiently secure to discourage attempts to defeat them and which do not require to inspect the host computer on which the software is run but instead protect the licensed software by enforcing the authentication of the documents generated by this software.